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Apartment sales logged another blockbuster year in 2016, even though numbers didn’t quite match those logged in 2015.

A total of 174 purpose-built rental properties worth nearly $1.5 billion changed hands in 2016, according to numbers compiled by David and Mark Goodman, who recently added Cynthia Jagger to their team at HQ Real Estate Services Ltd. This was down 4% from 2015.

About $3 billion in apartment properties changed hands in the past two years, more than in the previous five years combined. However, the number of properties represented by those dollars was far lower – 355 in the past two years versus 510 between 2010 and 2014.

Breaking down the sale prices, the dramatic shift in asset values becomes clearer.

This past year, the average price per suite in Metro Vancouver rose 52% to $377,000, well above the average of $248,000 in 2015.

Driven by redevelopment and densification potential, the upward movement of prices was particularly in evidence in Marpole. With its proximity to the Canada rapid transit line, Marpole is among the key areas next in line for redevelopment in Vancouver.

While suite prices in East Van were relatively flat, values in Marpole leapt over them, jumping 43% to $351,000.

David Goodman said buyers were primarily local, with no offshore purchasers.

Local strength

The recent sale of 833 West Pender to an undisclosed local buyer also reiterates the strong presence of locals in the Vancouver investment market.

The building, purpose-built for the Edward Chapman clothing company in the 1960s (see “Edward Chapman … page 7), sold for $19 million on the strength of its redevelopment potential (a formal plan for the building’s redevelopment isn’t yet available). The price works out to about $330 a square foot, based on potential building size of 56,160 square feet. The existing two-storey building is about 16,000 square feet, including the basement.

Six parties, all local, placed bids on the property, said Lance Coulson, senior vice-president with CBRE Ltd.’s investment properties group.

“I did have some calls from outside of Canada asking for additional information, and there was interest,” he said. “But when the offers came in, it was the local interest that wanted to move forward.”

Coulson said offshore demand has typically focused on residential properties, and when it comes to development sites, they’re interested in larger developments. The small, boutique nature of the Chapman site made it more appealing to locals who saw value in having a piece of a hard-to-get location with redevelopment potential.

Meanwhile, demand for the headquarters of Avigilon Corp. – one of the city’s tech stars – has come from all quarters.

Avigilon paid $42 million for 555 Robson Street in early 2015 but at the end of November 2016 announced its intention to sell the property.

“[It’s] attracting interest from a wide range of groups including local, national, U.S. and offshore investors,” Nelson said. “This points to continued strong interest in Vancouver office assets in a market where supply remains constrained.”

Last year, he thought a victory was won as BC Supreme Court decided that property taxes on sites where greater density is allowed should reflect current use rather than future development.

However, on January 13, BC Assessment informed Sullivan that the outcome of the case (known as the Amacon decision) wouldn’t become the norm for other properties.

Sullivan therefore plans to fight on.

“Personally I am outraged to litigate for three years, spending your money, win the case and to have it ignored as if it never happened,” he told those who funded the fight, including Vancouver business improvement areas, the Urban Development Institute and, of course, Amacon. “What we hope to convince the courts is that properties where there are business enterprise in it should be valued based on their existing use rather than as redevelopment value.”